Audit 356882

MW 2024‐001 REPORTING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Criteria: Per 2 CFR 200.303, non‐Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the terms and conditions outlined by the Environmental Protection Agency. EPA recipients must submit the Federal Financial Report (SF‐425) at least annually. EPA recipients must submit the SF‐425 no later than 90 calendar days for annual reports. Final reports are due no later than 120 calendar days after the end date of the period of performance of the award. Condition: The Federal Financial Report Standard Form 425 was submitted late to the Environmental Protection Agency on March 10, 2025. Cause: The Environmental Protection Agency had informed the Council that these reports were only due at closeout of the grant; therefore, the Council did not submit these reports. However, the Office of Inspector General (OIG) stated that this was not the correct procedure. As a result of the OIG's EPA audit, the Council filed these reports on March 10, 2025 with the EPA to be in compliance. Effect: Potential for unintended errors to occur without being immediately identified and corrected. The Council was not in compliance with the Uniform Guidance and the National Estuary Program. Questioned Costs: None. Perspective: All of the reports identified above were not reviewed. Recommendation: The Chief Operating Officer should obtain in writing any adjustments or clarifications to the grant awards to ensure the requested reports are prepared and reviewed. Management Response: EPA has never requested the SF425 (Federal Financial Reporting Form) from year’s prior and we were told verbally that we were only required to submit them at grant closeout. During a current EPA OIG audit, we were informed that the procedural process we were following was incorrect and that yearly reports were required to be submitted. To bring the IRL Council back into compliance with all federal awards, the Chief Operating Officer completed the FY 2024 forms and submitted them to EPA on March 10, 2025.

MW 2024‐001 REPORTING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Criteria: Per 2 CFR 200.303, non‐Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the terms and conditions outlined by the Environmental Protection Agency. EPA recipients must submit the Federal Financial Report (SF‐425) at least annually. EPA recipients must submit the SF‐425 no later than 90 calendar days for annual reports. Final reports are due no later than 120 calendar days after the end date of the period of performance of the award. Condition: The Federal Financial Report Standard Form 425 was submitted late to the Environmental Protection Agency on March 10, 2025. Cause: The Environmental Protection Agency had informed the Council that these reports were only due at closeout of the grant; therefore, the Council did not submit these reports. However, the Office of Inspector General (OIG) stated that this was not the correct procedure. As a result of the OIG's EPA audit, the Council filed these reports on March 10, 2025 with the EPA to be in compliance. Effect: Potential for unintended errors to occur without being immediately identified and corrected. The Council was not in compliance with the Uniform Guidance and the National Estuary Program. Questioned Costs: None. Perspective: All of the reports identified above were not reviewed. Recommendation: The Chief Operating Officer should obtain in writing any adjustments or clarifications to the grant awards to ensure the requested reports are prepared and reviewed. Management Response: EPA has never requested the SF425 (Federal Financial Reporting Form) from year’s prior and we were told verbally that we were only required to submit them at grant closeout. During a current EPA OIG audit, we were informed that the procedural process we were following was incorrect and that yearly reports were required to be submitted. To bring the IRL Council back into compliance with all federal awards, the Chief Operating Officer completed the FY 2024 forms and submitted them to EPA on March 10, 2025.

MW 2024‐001 REPORTING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Criteria: Per 2 CFR 200.303, non‐Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the terms and conditions outlined by the Environmental Protection Agency. EPA recipients must submit the Federal Financial Report (SF‐425) at least annually. EPA recipients must submit the SF‐425 no later than 90 calendar days for annual reports. Final reports are due no later than 120 calendar days after the end date of the period of performance of the award. Condition: The Federal Financial Report Standard Form 425 was submitted late to the Environmental Protection Agency on March 10, 2025. Cause: The Environmental Protection Agency had informed the Council that these reports were only due at closeout of the grant; therefore, the Council did not submit these reports. However, the Office of Inspector General (OIG) stated that this was not the correct procedure. As a result of the OIG's EPA audit, the Council filed these reports on March 10, 2025 with the EPA to be in compliance. Effect: Potential for unintended errors to occur without being immediately identified and corrected. The Council was not in compliance with the Uniform Guidance and the National Estuary Program. Questioned Costs: None. Perspective: All of the reports identified above were not reviewed. Recommendation: The Chief Operating Officer should obtain in writing any adjustments or clarifications to the grant awards to ensure the requested reports are prepared and reviewed. Management Response: EPA has never requested the SF425 (Federal Financial Reporting Form) from year’s prior and we were told verbally that we were only required to submit them at grant closeout. During a current EPA OIG audit, we were informed that the procedural process we were following was incorrect and that yearly reports were required to be submitted. To bring the IRL Council back into compliance with all federal awards, the Chief Operating Officer completed the FY 2024 forms and submitted them to EPA on March 10, 2025.

SD 2024‐002 SUSPENSION AND DEBARMENT United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220). Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred. Cause: Management was not aware of this procurement requirement. Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program. Questioned Costs: None. Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions. Recommendation: We recommend the Council continue with the controls that were implemented in late 2024 to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. As the control was not in place for the majority of 2024, it is a repeat finding. Management Response: The IRL Council amended its Operating Procedures following the FY 2023 finding to include suspension and debarment procedures into procurement methods for activities that are federally funded. The IRL Council Chief Operating Officer, immediately checked all current vendors for compliance within SAM.gov and all new or amended agreements have since been checked in SAM.gov for compliance. As noted by Carr, Riggs, and Ingram there were no instances of exception in their testing. Due to the timing of the FY 2023 finding, FY 2024 would also be considered a finding regardless of any corrective action taken.

SD 2024‐002 SUSPENSION AND DEBARMENT United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220). Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred. Cause: Management was not aware of this procurement requirement. Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program. Questioned Costs: None. Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions. Recommendation: We recommend the Council continue with the controls that were implemented in late 2024 to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. As the control was not in place for the majority of 2024, it is a repeat finding. Management Response: The IRL Council amended its Operating Procedures following the FY 2023 finding to include suspension and debarment procedures into procurement methods for activities that are federally funded. The IRL Council Chief Operating Officer, immediately checked all current vendors for compliance within SAM.gov and all new or amended agreements have since been checked in SAM.gov for compliance. As noted by Carr, Riggs, and Ingram there were no instances of exception in their testing. Due to the timing of the FY 2023 finding, FY 2024 would also be considered a finding regardless of any corrective action taken.

SD 2024‐002 SUSPENSION AND DEBARMENT United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220). Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred. Cause: Management was not aware of this procurement requirement. Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program. Questioned Costs: None. Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions. Recommendation: We recommend the Council continue with the controls that were implemented in late 2024 to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. As the control was not in place for the majority of 2024, it is a repeat finding. Management Response: The IRL Council amended its Operating Procedures following the FY 2023 finding to include suspension and debarment procedures into procurement methods for activities that are federally funded. The IRL Council Chief Operating Officer, immediately checked all current vendors for compliance within SAM.gov and all new or amended agreements have since been checked in SAM.gov for compliance. As noted by Carr, Riggs, and Ingram there were no instances of exception in their testing. Due to the timing of the FY 2023 finding, FY 2024 would also be considered a finding regardless of any corrective action taken.

SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.

SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.

SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.

MW 2024‐001 REPORTING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Criteria: Per 2 CFR 200.303, non‐Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the terms and conditions outlined by the Environmental Protection Agency. EPA recipients must submit the Federal Financial Report (SF‐425) at least annually. EPA recipients must submit the SF‐425 no later than 90 calendar days for annual reports. Final reports are due no later than 120 calendar days after the end date of the period of performance of the award. Condition: The Federal Financial Report Standard Form 425 was submitted late to the Environmental Protection Agency on March 10, 2025. Cause: The Environmental Protection Agency had informed the Council that these reports were only due at closeout of the grant; therefore, the Council did not submit these reports. However, the Office of Inspector General (OIG) stated that this was not the correct procedure. As a result of the OIG's EPA audit, the Council filed these reports on March 10, 2025 with the EPA to be in compliance. Effect: Potential for unintended errors to occur without being immediately identified and corrected. The Council was not in compliance with the Uniform Guidance and the National Estuary Program. Questioned Costs: None. Perspective: All of the reports identified above were not reviewed. Recommendation: The Chief Operating Officer should obtain in writing any adjustments or clarifications to the grant awards to ensure the requested reports are prepared and reviewed. Management Response: EPA has never requested the SF425 (Federal Financial Reporting Form) from year’s prior and we were told verbally that we were only required to submit them at grant closeout. During a current EPA OIG audit, we were informed that the procedural process we were following was incorrect and that yearly reports were required to be submitted. To bring the IRL Council back into compliance with all federal awards, the Chief Operating Officer completed the FY 2024 forms and submitted them to EPA on March 10, 2025.

MW 2024‐001 REPORTING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Criteria: Per 2 CFR 200.303, non‐Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the terms and conditions outlined by the Environmental Protection Agency. EPA recipients must submit the Federal Financial Report (SF‐425) at least annually. EPA recipients must submit the SF‐425 no later than 90 calendar days for annual reports. Final reports are due no later than 120 calendar days after the end date of the period of performance of the award. Condition: The Federal Financial Report Standard Form 425 was submitted late to the Environmental Protection Agency on March 10, 2025. Cause: The Environmental Protection Agency had informed the Council that these reports were only due at closeout of the grant; therefore, the Council did not submit these reports. However, the Office of Inspector General (OIG) stated that this was not the correct procedure. As a result of the OIG's EPA audit, the Council filed these reports on March 10, 2025 with the EPA to be in compliance. Effect: Potential for unintended errors to occur without being immediately identified and corrected. The Council was not in compliance with the Uniform Guidance and the National Estuary Program. Questioned Costs: None. Perspective: All of the reports identified above were not reviewed. Recommendation: The Chief Operating Officer should obtain in writing any adjustments or clarifications to the grant awards to ensure the requested reports are prepared and reviewed. Management Response: EPA has never requested the SF425 (Federal Financial Reporting Form) from year’s prior and we were told verbally that we were only required to submit them at grant closeout. During a current EPA OIG audit, we were informed that the procedural process we were following was incorrect and that yearly reports were required to be submitted. To bring the IRL Council back into compliance with all federal awards, the Chief Operating Officer completed the FY 2024 forms and submitted them to EPA on March 10, 2025.

MW 2024‐001 REPORTING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Criteria: Per 2 CFR 200.303, non‐Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance and the terms and conditions outlined by the Environmental Protection Agency. EPA recipients must submit the Federal Financial Report (SF‐425) at least annually. EPA recipients must submit the SF‐425 no later than 90 calendar days for annual reports. Final reports are due no later than 120 calendar days after the end date of the period of performance of the award. Condition: The Federal Financial Report Standard Form 425 was submitted late to the Environmental Protection Agency on March 10, 2025. Cause: The Environmental Protection Agency had informed the Council that these reports were only due at closeout of the grant; therefore, the Council did not submit these reports. However, the Office of Inspector General (OIG) stated that this was not the correct procedure. As a result of the OIG's EPA audit, the Council filed these reports on March 10, 2025 with the EPA to be in compliance. Effect: Potential for unintended errors to occur without being immediately identified and corrected. The Council was not in compliance with the Uniform Guidance and the National Estuary Program. Questioned Costs: None. Perspective: All of the reports identified above were not reviewed. Recommendation: The Chief Operating Officer should obtain in writing any adjustments or clarifications to the grant awards to ensure the requested reports are prepared and reviewed. Management Response: EPA has never requested the SF425 (Federal Financial Reporting Form) from year’s prior and we were told verbally that we were only required to submit them at grant closeout. During a current EPA OIG audit, we were informed that the procedural process we were following was incorrect and that yearly reports were required to be submitted. To bring the IRL Council back into compliance with all federal awards, the Chief Operating Officer completed the FY 2024 forms and submitted them to EPA on March 10, 2025.

SD 2024‐002 SUSPENSION AND DEBARMENT United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220). Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred. Cause: Management was not aware of this procurement requirement. Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program. Questioned Costs: None. Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions. Recommendation: We recommend the Council continue with the controls that were implemented in late 2024 to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. As the control was not in place for the majority of 2024, it is a repeat finding. Management Response: The IRL Council amended its Operating Procedures following the FY 2023 finding to include suspension and debarment procedures into procurement methods for activities that are federally funded. The IRL Council Chief Operating Officer, immediately checked all current vendors for compliance within SAM.gov and all new or amended agreements have since been checked in SAM.gov for compliance. As noted by Carr, Riggs, and Ingram there were no instances of exception in their testing. Due to the timing of the FY 2023 finding, FY 2024 would also be considered a finding regardless of any corrective action taken.

SD 2024‐002 SUSPENSION AND DEBARMENT United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220). Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred. Cause: Management was not aware of this procurement requirement. Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program. Questioned Costs: None. Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions. Recommendation: We recommend the Council continue with the controls that were implemented in late 2024 to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. As the control was not in place for the majority of 2024, it is a repeat finding. Management Response: The IRL Council amended its Operating Procedures following the FY 2023 finding to include suspension and debarment procedures into procurement methods for activities that are federally funded. The IRL Council Chief Operating Officer, immediately checked all current vendors for compliance within SAM.gov and all new or amended agreements have since been checked in SAM.gov for compliance. As noted by Carr, Riggs, and Ingram there were no instances of exception in their testing. Due to the timing of the FY 2023 finding, FY 2024 would also be considered a finding regardless of any corrective action taken.

SD 2024‐002 SUSPENSION AND DEBARMENT United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. Pursuant to 2 CFR section 180.300, the Council may not contract with or make subawards to parties that are identified as being suspended or debarred by the Federal Government. The Council must verify the parties’ eligibility to receive payment from a program funded by a Federal grant prior to entering a covered transaction (as defined in 2 CFR section 180.220). Condition: The Council did not have a process in place to verify that subrecipients and vendors for covered transactions were not suspended or debarred. Cause: Management was not aware of this procurement requirement. Effect: The Council could inadvertently enter a covered transaction with a suspended or debarred party, resulting in the disallowance of payments made to that party as eligible costs under the Federal program. Questioned Costs: None. Perspective: Many of the subawards made by the Council were to other local governments or universities, which are entities unlikely to be suspended or debarred. As part of our compliance testing, we tested a sample of subrecipients and vendors for suspension and debarment, noting no exceptions. Recommendation: We recommend the Council continue with the controls that were implemented in late 2024 to ensure the Council does not enter a subaward or other covered transaction with a party that is suspended, debarred or otherwise excluded from participating in federal awards. As the control was not in place for the majority of 2024, it is a repeat finding. Management Response: The IRL Council amended its Operating Procedures following the FY 2023 finding to include suspension and debarment procedures into procurement methods for activities that are federally funded. The IRL Council Chief Operating Officer, immediately checked all current vendors for compliance within SAM.gov and all new or amended agreements have since been checked in SAM.gov for compliance. As noted by Carr, Riggs, and Ingram there were no instances of exception in their testing. Due to the timing of the FY 2023 finding, FY 2024 would also be considered a finding regardless of any corrective action taken.

SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.

SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.

SD 2024‐003 SUBRECIPIENT MONITORING United States Environmental Protection Agency ALN 66.456 – National Estuary Program Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923 2024 Funding Repeat finding Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal controls. The use of subrecipients in achieving the goals of the federal award requires the establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331 and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award and any additional requirements that the pass‐through entity imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Condition: The Council did not have controls in place to obtain and review subrecipient single audit reports as a means to ensure the subrecipients are taking timely and appropriate action on deficiencies, if any, pertaining to the Federal award. Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not yet available the prior fiscal year's audit was not requested to review for any deficiencies. Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have sufficient information to evaluate the risks of noncompliance associated with a subrecipient. Questioned Costs: None. Perspective: The Council did perform monitoring activities related to the use of funds by subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8 subrecipients sampled, audit reports were obtained for 4 subrecipients. Recommendation: If the most recent subrecipient audit report is not yet available, management should request the prior fiscal year if not already obtained. Management Response: The IRL Council put controls in place to be more effective at subrecipient monitoring following the FY 2023 finding which included the following actions: The IRL Council reviewed all projects and activities currently allocated and funded by federal sources to ensure the Uniform Guidance was in place within their respective agreements, and they were amended as needed. All new subrecipient agreements funded by federal sources were not executed until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however for the ones who had not completed their FY 2024 audit, a prior year audit report was not immediately requested and statements for those subrecipients had not yet been made. The IRL Council will implement a control to request prior year Financial Statements/audit reports from subrecipients who have not yet completed their report for the year being requested during the Council’s monitoring.